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July 2012


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Household electric appliance industry has grown fast in Indonesia from year to year.   Among the main products are air conditioners (AC), refrigerators  and  washing machines.

In 2011, the country's production  of  AC totaled  1,142,000 units  or an increase of 23.7% from 923,000 units in the previous year. The production of  refrigerators  rose 0.4% to 2,240,000 units from 2,230,000 units, and the production of  washing machines  rose 13.7%  to 1,810,000 units  from 1,592,000 units in 2010. 

Meanwhile,  a rapid growth has also been recorded in the  market size with sales growing 19% in 2011. According to the Association of Electronics Producers (Gabel),  AC sales reached 3,500,000 units, refrigerators sales totaled 1,750,000 units  and  washing machine sales were recorded at 1,840,000 units in 2011.

The rise in sales followed improved economic condition of the country and purchasing power of the people. AC sales depends much on the  condition of the property sector. ACs are used not only by houses but also other big property buildings such as hotels, apartments, malls, office buildings including house shops, which are larger consumer of Split AC. Unlike Indonesia, advanced countries generally use central ACs by the building operators.

Producers see the potential in Indonesia and make innovations by producing ACs to suit the market. Currently, low voltage ACs are  mass produced in the country for houses with limited power supply.

Innovation is also made by electronic goods producers for refrigerators, launching the type with the technology of health guard  and  door cooling  and for washing machines with the launch of new technology of Automatic, which combines two concepts of manual washing and automatic washing into one  such as Electrical Control Panel With Automatic Fill Water System For Wash  and Rinse. This system of washing is a new concept of washing machines with two tubes in the process of water filling for washing and bleaching and technology of ecobubble , etc. 

The Indonesia market is quite big with 62 million households. The potential market has prompted producers to make the country a production base.  A number of producers have expanded their production capacity such as  PT. Sharp Electronics Indonesia, P.T. Toshiba Consumer Products Indonesia and  PT. Panasonic Gobel Indonesia. Even Chinese producer PT. Midea Elektronik Indonesia plans to strengthen its market foothold in the country by building an  AC factory in the country.

Characteristics of Household Electric Appliance Industry

Household electric appliance has been growing steadily. The industry has reamined stable  with no significant change in technology as their value lies more in their simple function rather than in their appearance or design.

The competition among the products of household electric appliance, especially  small appliances such as  fans,  electric irons,  mixer,  rice cooker, etc. Is more in quality  or durability.  The competition  is more in price  that  producers operating full  manufacturing factories in large scale  are more competitive  in price.

With prices more determinant, there is little loyalty of consumers in certain   brand as the quality is relatively the same. Therefore, big producers  operating full manufakturing factories  such as Sharp, Sanyo  and Panasonic focus more on development of major appliances such as refrigerators, air conditioners, washing machines and higher technology consumer electronic goods like TV  and  DVD player, the technology of which is advancing from time to time.  The big producers also see potential competitors from China in the market of small appliances. China could enter the market with much cheaper prices though the quality is a little inferior.

Types of Products of Household Electric Appliance

There are two types of electrical appliances -- major appliances  and  small appliances.

The types included in the category of major appliances are washing machines, refrigerators , air conditioners (AC), water pumps, etc. Included in the category of small appliances are  fans, electric irons, blenders, mixers, rice cookers, etc.

Production Capacity 

In  2011,  the  country's production capacity for refrigerators was  2,240,000 units per year, production capacity  for ACs  was 1,142 ,000 units per year  and  production capacity for   washing machines  was 1,810,000 units per year. 

Among big producers of AC in term of production capacity are PT. LG  Electronics Indonesia, PT. Sharp Electronics Indonesia and  PT. Changhong Elektronik  each with a capacity of 500,000 units per year.
PT. Teco Elektro Indonesia has a production capacity of   300,000 units per year. PT Teco Elektro Indonesia is a subsidiary of Teco Electric and Machinery Co. Ltd.   Producing window AC  and  wall mounted split AC with the brand of  Teco. Almost the  entire production of the company is exported such as to Taiwan, Australia. New Zealand, Europe and Africa.

Major local producer is PT Hartono Istana Teknologi having  big production capacity of 100,000 units  per year mainly  AC.

Major producers of  refrigerators include  PT. Sharp Electronics Indonesia with a  production capacity of 1,440,000 units per year, PT. LG Elektronics Indonesia 799,7,000 units/year  and  PT. Panasonic Gobel Indonesia 600,000 units/year.

Main producers  of washing machines are PT. Sharp Electronics Indonesia  with a production capacity of 840,000 units/year, PT. Sanken Argadwidja 80,000 units/year  and  PT. Sanyo Industries Indonesia  60,000 units/year.


Based on official data at the industry ministry, the country's production of household electrical appliances has increased in the 2007-2012 period.

The production of refrigerators  totaled  2,194,000 units  in  2007, up to 2,240,000 units in  2011 and to an estimated 2,350,000 units in 2012. 

AC production  totaled 1,142,000 units in 2011 surging from 199,000 units  in  2007. In 2012, the  production was estimated at 1,200,000 units.   

The production of washing machines rose from 399,000 units in 2007 to 1,810,000 units  in 2011 and to an estimated 1,900,000 units in  2012.    


Producers of household electric appliance are still dominated by Japanese and Korean companies .

Among the Japanese producers are Panasonic, Toshiba  and  Sharp, which have been more than 20 years operated in the country.

Producers from Korea include LG and Samsung which have been highly competitive facing Japanese producers.

Among major local producers of household electric appliance  especially small appliances such as  fans, rise cookers, blenders  and  mixers are PT Maspion Elektronik, PT Sanken Argadwija, PT Hartono Istana Teknologi , etc.
Later in 2010, Chinese producers entered the market  including Haier Group from Shandong through its subsidiary PT Haier Sales Indonesia, which acquired Sanyo Electric Co Ltd units in Southeast Asia including in Indonesia at a price of US$ 100 million. In Indonesia, Haier Group took over PT Sanyo Indonesia  and  PT Sanyo Sales Indonesia.
Currently Haier Group controls production facilities and sales of Sanyo    products in Southeast Asia including in Malaysia, the Philippines, Vietnam  and  Indonesia as well as in Japan.  Haier Group reported US$23.3 billion in revenue in 2011.

Starting 2011 PT. Midea Planet Indonesia, a Chinese company, imported electrical products including refrigerators, AC  and  washing machines produced by Midea in  China. 
Midea's products include 4 types of AC, 6 types of washing machines  and  6 types of  refrigerators. However, Midea's share of the market is still relatively small,  only  around 3%-5%  with a turnover of Rp100 billion in 2011. In 2012 its sales target was set at Rp200 billion. 

Main players 

Among main players  in electrical appliance industry are PT LG Electronics Indonesia, PT Panasonic Gobel Indonesia, PT Sharp Electronics Indonesia,     PT Sanyo Industries Indonesia, PT Topjaya Antariksa Elektronika and PT Maspion.

PT LG Electronics Indonesia

LG Electronics Indonesia entered the Indonesian market through joint       venture  PT Goldstar Astra in 1990. Following the monetary crisis in 1998, LG sold its stake in the joint venture company to its Indonesian partner Astra. However,  it resumed business in Indonesia later and its business flourished  and became one of the largest producers of electrical and electronic goods in the country. It even  made Indonesia  its main market target in ASEAN.  It produces electrical and electronic goods including TV sets, refrigerators, washing machines, DVD, etc.

TV and refrigerators are the main products contributing to LG's income. LG became the market leader  with a 30% share of the market of AC  in the country. Most of its products are produced in its production base in  Thailand.

LG relies on its latest anti virus and energy saving AC  of the Neo Plasma Ion Plus 320 watt series and  Neo Plasma Ion II, priced at Rp2.9 million each  and  Inverter priced at Rp5.5  million.

In  2012, PT. LGIN set sales target at 70,000 units per month.

PT Panasonic Gobel Indonesia
PT Panasonic Gobel Indonesia (PT. PGI) succeeded in going through the devastating monetary crisis in 1998 in the country. Now it is one of the largest producers of electrical and electronic appliances in the country.

The company was established in 1970 with the name of PT National Gobel, owned by Matsushita Electric Industrial Co. Ltd (60%) and Gobel International (40%).

It began operation producing black and white TV sets, Fans  and  cabinet.       PT. PGI  expanded  and produced radio cassettes,  ventilating fans, AC, refrigerators, washing machines, electric irons, etc.

Recently Panasonic launched AC with new technology Envio Inverter, produced in Malaysia.

In  2010, Panasonic Corp in Japan acquired Sanyo Electric Corp.

Panasonic  targeted to have a 27% share of AC market in  Indonesia with sales totaling 1 million units  in  2012 . ACs account for 35% of PT. PGI's sales.
The  Panasonic Group has 16 subsidiaries in Indonesia,  with 80% of  production exported. Its sales in Indonesia are only about 0.3% of its total sales in the world and the third largest in ASEAN after  in Malaysia  and  Thailand.

PT Sharp Electronics Indonesia

Sharp made its first appearance in Indonesia in  1968, selling black and white  TV sets  imported from Singapore. In 1970, Sharp  named a representatives in Indonesia as a sole agent PT Yasonta.

In 1994, Sharp Corporation acquired  90% of the shares of  the Yasonta Group and established PT Sharp Yasonta Indonesia to produce refrigerators, TV sets, washing machines  and  AC.

Sharp products include TV, Car audio cassette, washing machines, refrigerators, AC, fans, rice cookers, etc. Currently all Sharp AC sold in Indonesia are imported from Thailand where Sharp has a factory with a production capacity of 2.8 million  units per year.
PT Sharp Electronics Indonesia plans to build its first AC factory in Indonesia over a  31 hectare plot of land in Karawang, West Java with an investment of   Rp 1.2 trillion. The factory will have a production capacity  of 500,000 units of   AC  per year. It also will produce TV expanding its TV production capacity  by 400,000 units per year.  The new factory will start operation by the end of  2013.

Its production capacity for  washing machines will also be expanded  from 50,000 units per month  to 140,000 per month  and production capacity for refrigerators is to be expanded from 120,000 units per month to 220,000 units per month .
With the capacity expansion, the company would increase its exports of washing machines  and refrigerators  from  7%  to 10% of its  total production .
In 2011, Sharp's sales of consumer electronic products in the country were valued at Rp7.4 trillion  or around 25% of the total sales of consumer electronic goods  in the country.  See the following table.

PT Hartono Istana Teknologi

PT Hartono Istana Teknologi (PT. HIT) is a producer of electronic and electrical appliances with local brand  with products fully manufactured in the country. The company was established in 1976, when Japanese brands like  Sanyo, Sharp, Panasonic and a number of European products already dominated the domestic market.

PT HIT uses the brands of Polytron  and  Digitec. It once dominated the market of audio electronics like Radio cassette Compo  and portable  Karaoke products .

In the beginning PT HIT produced  small appliances products, but later it also produces major appliances like washing machines, refrigerators and AC competing against major products from Japan and Korea and China.

Recently PT. HIT began to enter the market of telecommunication equipment    by producing smartphone with the brand of Polytron series of Wizard Crystal W3430 and PW1100S, which are based on the technology of Android ICS (Ice Cream Sandwich) version 4.0.3, with 4.3 inches screen equipped with camera having a resolution of 8 mega pixel priced at Rp 1 million - Rp 2.9 million each. The  smartphone  market  in the country was estimated to reach 50 million units  in 2012. Polytron smart phone has a market share of 10%  in the country. PT. HIT cooperates with the cellular store chain of Eraphone, which has a 28% share of the cellular market in Indonesia. Foxconn Technology Group from China offers to cooperate in investment with PT. HIT to build a gadget factory. So far PT. HIT still imports spare parts of  smart phones from  China.

In  2012,  PT HIT set sales target at Rp3.6 trillion  or 30% higher than last year. The largest earning  in the first half of 2012 was  from the sales of refrigerators   and  washing machines,  each recording a growth of more than 30%

Investment Brisks

In 2012 PT. Sharp Electronics Indonesia (PT. SEI) planned to build its first AC factory in Indonesia to be located over 31 hectare plot of land in Karawang, West Java. The new factory will have an annual production capacity  600,000 units of AC. The company also planned to increase its production capacity for TV sets  by 400,000 units per year, and the production capacity for washing machines by 1,680,000 units per year  and refrigerators by 2,640,000 units per year. PT. SEI would spend around Rp 1.2 trillion on the project to be completed in October 2013.

Currently all AC units of Sharp sold in Indonesia are imported from Thailand, where it has an AC factory with a production capacity of 2.8 million units per year.

The capacity expansion would increase SEI's capacity to export washing machines  and refrigerators  from  7% of its total production  to more than 10% of its total production. 

PT Toshiba Consumer Product Indonesia (PT. TCPI)  will  invested Rp350 billion on a new washing machine factory with a capacity of 50,000 units per month or  600,000 units per year.

The new factory is being built over a 10,000 hectares plot of land in the East Jakarta Industrial Park of  Cikarang. The factory, which  has 2 lines of machines will be the production center for washing machines of Toshiba for Southeast Asian market . It is to start operation in 2013.

PT. TCPI already has a production center for TV panels in Cikarang. Refrigerators  and  AC with  Toshiba brand are produced by PT Topjaya Sarana Utama in  Bekasi.

The washing machine factory in Indonesia is to meet the global target for Toshiba production. Toshiba Home Appliance Corporation, a subsidiary of Toshiba Corporation, will increase its production for  washing machines in the world  to 1 million  units  in  2015. The market of washing machines in Indonesia is 30% of the  total market of  washing machines in Southeast Asia that reached 5.5 million  units  in  2010.

It is predicted that the Indonesian market  will rise  to 50%  of the Asean market which is forecast to reach more than 9.2 million  units of washing machine in 2015. The market of twin tube washing machines in Indonesia grew 23% in  2011 from 1.77 million units  in  2010. That type of washing machines had a 60% share of the market of washing machines  in Indonesia in  2010.

Indonesia's  washing machine requirement averages  3 million  units per year as against Southeast Asian's requirement of 7 million units of twin tube washing machines  per year. Indonesia, therefore, accounts for around 40% of the market of twin tube washing machines in the region. The  new factory in Indonesia could reduce the cost  and the price of  the twin tube washing machines  of  Toshiba.

In 2011, Toshiba had only a 3% share of the market of washing machines in  Indonesia. With an annual increase in demand of 20% in the country, Toshiba could increase its market share in the coming years. Currently  twin tube washing machines dominate  70% of the market of washing machines in Indonesia.

PT. Midea Elektronik Indonesia (PT. MEI), the producer of electronic goods from China plans to build an AC assembling plant  with a production capacity of  100,000 units per year. The project will cost around US$30 million . The factory will add to  production units Midea already has in Vietnam. PT MEI will make Indonesia a  production base to meet domestic demand and exports  to  other ASEAN  countries and  Australia...............

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